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Analysts forecast Sam’s Club closings to hurt small businesses

Special To The Washington Post

January 15. 2018 10:31PM
Customer Steve Hyzny uses the new Scan and Go App on his cellphone while shopping at the Sam’s Club in Hodgkins, Ill., in December. Last week, Walmart announced that it would be closing 63 of its under-performing Sam’s Club (Antonio Perez/ Chicago Tribune/TNS)

Last week, Walmart announced that it would be closing 63 of its under-performing Sam’s Club stores at various locations throughout the country (including one in Seabrook, N.H.). While most of the news centered around the thousands of employees who would be affected by the decision, another significant group of people will also be negatively impacted: hundreds, even thousands of local small businesses.

Sam’s Club has historically prided itself on the services it has provided its small business members which include (for an annual fee) discounts on bulk purchases of office supplies, food, materials and other goods, financing, payment solutions and even health-care insurance. The chain also has special hours to accommodate its small business customers — many of whom start the day early. So it’s understandable why so many local merchants, restaurants, coffee shops and other small businesses were upset to learn of the sudden closures.

“They’re a significant part of my business,” Joe Gerace, the owner of a Chevron store in Anchorage, Alaska, said in a local television report. Gerace buys more than 300 items from Sam’s Club, and spends about $50,000 at the store every month. Walmart said it’s closing all Sam’s Club stores in the state.

Tamm DiCecca, who owns a cake shop in Greece, N.Y., buys much of her supplies from Sam’s Club (the chain plans to close four of its 16 locations in the state). “That’s horrible news to many small businesses,” she told the Democrat and Chronicle.

It’s the same story in Florida.

“I go to that Sam’s three times a week. It’s an integral part of our business,” Roberto Torres, the owner of Blind Tiger Cafe in St. Petersburg, said in another local television station report. “We buy 30 percent of our cleaning supplies (there). I was going to buy a safe and some security cameras. I mean this is a very important store.”

This is not the first time this has happened. Back in 2016, Walmart closed 250 Sam’s Club locations, and last year its Manchester, N.H., store was among another round of closures. Even after this round, there still be almost 600 Sam’s Clubs in operation around the country.

Meanwhile, the company’s competitors, BJ’s Wholesale Clubs and Costco, are hoping to step in to the void.

BJ’s, according to a New York Times report, has already seen an “immediate increase” in new memberships.

BJ’s previously announced plans to move into the Manchester space vacated by Sam’s Club.


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